Comment: Hester’s successor must restore confidence

TERRY MURDEN

THE Stephen Hester days are drawing to a close. His successor as chief executive of Royal Bank of Scotland could be announced this week, allowing him to spend more time on his Oxfordshire estate.

There is no certainty that an appointment will be announced before or to accompany Friday’s half-year results, but as we say in our page 19 report the bank is coming under pressure to make an announcement and end the uncertainty.

It had hoped to bring in Mark McCombe, the head of Asian operations for BlackRock, But he turned the bank down. He, like others, may have considered it a job that came with too much public scrutiny.

The job of CEO is clearly not the one it used to be, when even the heads of the banks were relatively anonymous beings, only known to the geeks of the financial world and their friends at the golf club. Nowadays, their every move is monitored and challenged, their comments capable of front page let alone business page headlines.

They carry a dubious celebrity status that can be rewarding in good times, but rotten luck if their appointment coincides with crisis. Certainly in recent times the very term “banker” has become synonymous with incompetence, greed, recklessness and many other derogatory descriptions that have tainted a once honourable profession.

So who in their right mind would want to run a bank?

Make no mistake, there will be no shortage of willing takers, and in a perverse sort of way the poisoned nature of the job may add to its attractions and tell us something about the calibre of the eventual appointee, It will require someone with a robust constitution, who is capable of facing down the sternest of critics and unflinching when required to make unpopular decisions.

Aside from running the bank, the next incumbent at Gogarburn will have the important task of dealing with the political establishment on a much higher level than hitherto. He or she will have to lead its return to the private sector through a potentially tricky process that will inevitably be tied to the fortunes of the coalition. The Chancellor George Osborne will not want it to disrupt the general election campaign; indeed, he will want a successful transition that he can contrast with the collapse of RBS under Labour.

It means that, to a degree, the Treasury will be in control of RBS. For that reason, Stephen Hester’s successor has to be someone savvy in politics, diplomacy and steeped in the retail banking culture that ministers want RBS to embrace. For that reason Ross McEwan, the New Zealander brought in to run the UK retail bank, is among the frontrunners, though Chris Sullivan, the corporate banking chief, has always been highly thought of.

It is unfortunate that with McCombe turning down the role, the eventual appointee will be seen as the second-best choice, assuming no-one else rejects an offer. But this is an opportunity for the successful candidate to stamp their identity on the bank and restore its pride and that of the banking industry.